Back to Ecommerce Basics: Shattering the Endless Shelf

ecommerce mobile in store

Somewhere during the last two years, the myth of the endless shelf — or endless aisle, if you will — of ecommerce ran into trouble. To make it work, brands found out they needed a lot more infinity than they realized. Infinite manufacturing. Infinite scaling. Infinite warehouses. Minimum drama.

Unfortunately, reality had struck. During the pandemic, they learned that while customer demand can grow exponentially, the supply chain can’t. It soon became clear that even Amazon doesn’t have unlimited warehouse space. The labor market was not endless. And snarled supply chains made it impossible to guarantee a steady flow of products, let alone scale up when demand spiked.

At the same time, customer expectations stayed high. But when people can’t see or buy their preferred brands, they try others. And if they find they like them, they change their loyalty and disrupt the market. According to McKinsey, 75% of Americans switched brands during the pandemic, with availability as a top reason for doing so.

As a data person, I tend to look for a metric that can help cut through the clutter. In ecommerce, we formerly used revenue, market share and similar metrics to gauge success. But if customer experience is going to be the touchstone of success, customer lifetime value (CLV), or the amount a brand can expect from any given customer over time, should be our guiding principle.

Above all, CLV is a gauge of experience. The better the experience a person has, the more likely they are not only to purchase again but also to buy other products from a brand. So how does this affect a brand’s priorities?

Concentrate on Operations

Up until a few years ago, discussions around supply chains typically touched on concepts like agility and just-in-time performance. Since the disruptions of the last two years, that has shifted — and not a little. Some have argued that brands should ditch efficiency and build in redundancy to ensure that the customer experience remains positive. Whatever the case, your products need to be where your customers are, so have a plan A, B and C to address potential disruptions.

Optimize Advertising

Prior to the pandemic, digital advertising, like ecommerce itself, seemed to have an unlimited inventory. But as ecommerce spiked more than 30% during the pandemic, effective advertising space has also dropped, and costs have risen. There are only so many placements above the fold, and human eyeballs only scroll so far before being distracted by something else. As a result, it’s important to be as strategic as possible about advertising investment, and understand exactly what you’re getting as a result of it.

Nail the Fundamentals

What you might think otherwise, this often means getting Amazon right. Today, Amazon offers the largest audience in the world and is likely the first point of contact between a potential customer and your brand. It’s important to make sure that your listings have all of the content and images needed, and that your keywords are optimized. From there, you should implement intelligent search strategies, including on third-party sites, to ensure that your products appear first when people are looking for them.

Double Down on Brand

The cheapest click you can ever get is the one that you don’t buy. While prior to the pandemic, many companies de-emphasized brands, especially on Amazon, this is no longer the right strategy. It’s important to invest in the entire experience that people have with your brand, whether that’s creative advertising or simply delivering a great post-purchase experience.

Be Where Your Customers Are

Brands don’t get to choose where their customers prefer to shop. In addition to a strong Amazon presence, try to be everywhere your customers gather. That could be a Facebook group, another marketplace, or a niche ecommerce platform. Bonus points for remembering that the Amazon algorithm rewards you for bringing in new customers from other platforms. Even if you don’t have an ecommerce site of your own, driving traffic from third-party sites is never a bad idea.

Growing your brand today takes more than merely building great products and creating an endless shelf. It’s about making smart, holistic decisions about your entire business: Supply chains, advertising and product development. What may have looked crazy in the past, such as building a redundant supply chain, makes increasing sense in a more disrupted world where customers’ shopping habits may have changed, but their expectations for great experiences certainly haven’t.

Justin Marshall is Chief Growth Officer of Netrush